Market Optimism Defies Tariff Threats
Despite President Trump’s announcement of potential tariff hikes on Canada and Mexico, the stock market rally remains strong. Dow Jones futures, S&P 500 futures, and Nasdaq futures all rose modestly early Tuesday, with the Nasdaq and S&P 500 above their 50-day moving averages.
Leaders Flash Buy Signals
Many leading stocks are showing signs of strength, with Tesla, ServiceNow, Vertiv, and Broadcom flashing buy signals. Goldman Sachs, Energy Transfer, Viking Cruises, and Quanta Services are also actionable, along with several of their respective peers.
Cryptocurrency Market Awaits Executive Orders
Bitcoin surged to an all-time high of $109,000 on Sunday, driven by optimism surrounding Trump’s potential executive orders related to cryptocurrencies. However, both Trump’s $TRUMP meme coin and Melania Trump’s $MELANIA meme coin have tumbled from their peaks.
Economic Policy Shifts
President Trump has declared national emergencies on energy and the southern border, and has revoked the EV mandate. He has also threatened to impose 25% tariff hikes on Canada and Mexico on February 1, and has given TikTok a reprieve from a law banning the Chinese-owned video app.
Stock Market Rally Shows Strength
The Dow Jones Industrial Average gained 3.7% last week, briefly topping the 50-day moving average. The S&P 500 index popped 2.9%, and the Nasdaq composite 2.45%, both moving above their 50-day lines. The small-cap Russell 2000 jumped about 4%, but is still below the 50-day line.
Investors Should Take Advantage
With the stock market rally showing strong bullish signals, investors should take advantage and add exposure gradually. They should also look to buy stocks beyond the artificial intelligence and tech space, given the breadth of leadership right now. However, they should be ready to scale back if the market does retreat.
Earnings Season Ramps Up
Earnings season will ramp up this week, with Netflix, GE Vernova, GE Aerospace, and American Express among the many notable names. Investors should stay focused on market direction and leading stocks and sectors.
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